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TREASURY CLAWS BACK£2.5M AID FOR TOURISM

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As British tourism continues to suffer from the consequences of the foot-and-and -mouth epidemic, the treasury is s...
As British tourism continues to suffer from the consequences of the foot-and-and -mouth epidemic, the treasury is siphoning off£2.5m from the government's own emergency package, according to The Independent on Sunday (p6).
The campaign to bring back foreign vistors after the impact of the epidemic has been undermined by a ruling that a£14.2m grant to the British Tourist Authority is subject to 17.5% VAT.
An Independent on Sunday survey of the bed-and-breakfast industry, one of the mainstays of rural tourism, shows close to a 50% drop in bookings.
Despite tourism and hospitality industry spokesmen complaining about the VAT requirment, a treasury spokesman said that VAT was always payable on state aid packages because the tax system did not make any exceptions, even for government.
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